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[2013] ZACT 89
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PSG Private Equity (Pty) Ltd v Precrete Holdings (Pty) Ltd (016634) [2013] ZACT 89 (16 August 2013)
COMPETITION
TRIBUNAL OF SOUTH AFRICA
Case
No: 016634
In
the matter between:
PSG
Private Equity (Pty) Ltd Acquiring Firm
And
Precrete
Holdings (Pty) Ltd Target Firm
Panel:
Andreas
Wessels (Presiding Member)
Anton
Roskam (Tribunal Member)
Takalani
Madima (Tribunal Member)
Heard
on:
14
August 2013
Order
issued on:
14
August 2013
Reasons
issued on:
16
August 2013
DECISION
Approval
[1]
On 14 August 2013, the Competition Tribunal (the “Tribunal”)
unconditionally approved the acquisition by PSG Private
Equity (Pty)
Ltd (“PSG”) of Precrete Holdings (Pty) Ltd (“Precrete”).
[2]
The reasons for the approval of the proposed transaction follow.
Merging
parties and their activities
[3]
The primary acquiring firm is PSG, an investment holding company. PSG
is a wholly owned subsidiary of PSG Financial Services
Limited,
which, in turn, is a wholly owned subsidiary of PSG Group Limited
(“PSG Group”). PSG Group holds various interests
in a
wide range of public and private companies. Of relevance to this
transaction is that PSG has an existing direct interest in
Precrete
of 8.64% and directly and indirectly holds 92.02% of the issued share
capital of Thembeka Mining Holdings (Pty) Ltd (“TMH”).
TMH is an investment holding company with its only investment being
its 39.36% interest in Precrete.
[4]
The primary target firm is Precrete. The other current shareholders
in Precrete other than PSG and TMH are: (i) Hans du Toit
Family Trust
(19.36%); (ii) Zico Capital (Pty) Ltd (19.2%); (iii) Piet Du Toit
Family Trust (9.44%); and (iv) RA Aucamp Familie
Trust (4%).
1
[5]
Precrete is involved in the production and distribution of pre-mix
concrete as well as the application and installation of secondary
support systems in mines predominantly in the platinum sector.
Proposed
transaction and rationale
[6]
As stated above, PSG has a direct shareholding in Precrete of 8.64%
premerger as well as a controlling interest in TMH
which, in
turn, has a shareholding in Precrete of 39.36% premerger. In terms of
this transaction PSG, through its nominee TMH,
intends to acquire a
further 7.2% in the issued share capital of Precrete, thereby
increasing its effective shareholding to a controlling
interest of
55.2%. Upon completion of the proposed transaction PSG will thus have
sole control of Precrete.
[7]
PSG has been invested in Precrete since 2007 and views the business
as successful with additional growth potential.While PSG
Group has
interests in various industries, it has no interests in the pre-mix
concrete industry save for its pre-existing interests
in Precrete
itself. This conclusion holds true on both a horizontal analysis and
a vertical analysis.
Market definition and competition
analysis
[8]
Given the lack of any potential overlaps between the activities of
PSG Group and Precrete, there is no need for us to define
any
relevant markets. Furthermore, for the same reason, we conclude that
there is no substantial prevention or lessening of competition
likely
to result from this transaction.
Public
interest
[10]
The merger parties confirmed that the proposed transaction will have
no adverse effect on employment. It informed the National
Union of
Mineworkers (NUM) representing the employees of Precrete and the
employee representative at PSG of the proposed transaction
and its
anticipated effect on employment.
2
The proposed transaction raises no other public interest concerns.
Conclusion
[11]
For the reasons mentioned above, we approve the proposed transaction
unconditionally.
ANDREAS
WESSELS
16
August 2013
Date
Anton
Roskam and Takalani Madima concurring
Tribunal
Researcher: Andrew Sylvester
For
the Commission: Grashum Mutizwa
For
the Commission: Nazeera Ramroop of Cliffe Dekker Hofmeyr Inc.
1
Merger
record, pages 29 and 30.
2
See
inter
alia
pages 9 and 43 of the merger record.